The Parliamentary Budget Officer (PBO) today released an updated financial and economic analysis of the federal government’s $4.4 billion purchase of the Trans Mountain Pipeline (TMP), Trans Mountain Expansion Project (TMEP), and related assets.
The Parliamentary Budget Officer (PBO) today released an independent cost estimate of the Royal Canadian Navy’s project to build two Joint Support Ship (JSS) vessels, and an estimate of the cost of contracting similar capacity from Chantier Davie Canada Inc. (Davie). This report was prepared in response to a request from the House of Commons Standing Committee on Government Operations and Estimates (OGGO).
The JSS project aims to build two new support ships to replace legacy Protecteur-class auxiliary oiler replenishment vessels decommissioned in the last decade. Since the two new vessels are expected to be delivered in 2023 and 2025, the federal government contracted Davie to convert a commercial vessel, the MV Asterix, to military support ship specifications to maintain the Navy’s at-sea replenishment capability during JSS construction. Davie has also offered the government an option to contract a second vessel, the Obelix.
The report, The Joint Support Ship program and the MV Asterix: a Fiscal Analysis, estimates the total cost of the new JSS vessels to be $4.1 billion. This is comparable to the $4.1 billion estimate published by the Department of National Defence (which does not factor in the cost of the provincial sales tax).
The total net cost of the current MV Asterix contract is projected to be $733 million over 5 years ending in 2023. The PBO projects that total cost of a new 5-year contract for the Obelix, starting in 2023-2024, would be $801 million.
The Department of National Defence also has the option to purchase the contracted vessels from Davie.
“Net of any costs associated with this initial contract, we estimate a total cost of approximately $1.4 billion for the purchase of the two Davie vessels”, explained Yves Giroux, PBO. “This is lower than the cost of new vessels under the JSS project.”
An assessment of the capabilities of the Asterix and Obelix as commercial vessels converted for military purposes versus those of the built-for-purpose JSS vessels is outside the scope of this report.
These estimates do not assume any COVID implications on the costs or schedule of the JSS.
The Parliamentary Budget Officer (PBO) today released an update of his assessment of the long-term sustainability of government finances, analyzing the impacts of unprecedent pandemic support spending on public finances in Canada.
According to PBO Yves Giroux, the long-term outlook for the government sector as a whole remains sustainable under current fiscal policy—assuming no new permanent programs are introduced.
Fiscal Sustainability Report 2020: Update incorporates federal and provincial governments’ pandemic budgetary measures and assumes that these measures are withdrawn as currently scheduled.
Based on the PBO’s assessment, the federal government, and the provinces of Quebec, Nova Scotia, as well as Ontario all have the fiscal flexibility to increase spending or to reduce taxes. Current fiscal policy is not sustainable in the remaining provinces and the Territories.
“Assuming that pandemic spending is temporary, current fiscal policy at the federal level is sustainable over the long term”, says Yves Giroux, PBO. “However, most provinces face a financial situation that is unsustainable in the long term.”
Rising health care costs due to population ageing continue to drive the deterioration in provincial and territorial government finances over the long term. The negative impact of the pandemic and oil price shocks contribute to higher program spending relative to GDP, straining finances across provinces and territories in 2020.
The Fiscal Sustainability Report 2020: Update is designed to identify whether changes in current fiscal policy are necessary to avoid excessive growth in government debt and estimate the magnitude of those changes using the fiscal gap.
The Parliamentary Budget Officer (PBO) today released a new report which provides an analysis of the fiscal impact of increased federal public service employee salaries and benefits resulting from the enactment of the federal Pay Equity Act (the Act).
The Parliamentary Budget Officer (PBO) today released an updated analysis of the additional carbon pricing needed to achieve Canada’s greenhouse gas emissions (GHG) target in 2030 under the Paris Agreement.
The Parliamentary Budget Officer (PBO) today released a report that summarizes a few key early results of the federal government’s Innovation Superclusters Initiative (ISI).
The Parliamentary Budget Officer (PBO) today released a report that summarizes the federal package of COVID-19 liquidity support programs provided through five federal Crown corporations: The Bank of Canada, Farm Credit Canada, Export Development Canada, Business Development Bank of Canada, and Canada Mortgage and Housing Corporation.
The Parliamentary Budget Officer (PBO) today released his latest Economic and Fiscal Outlook. The report incorporates announced federal budgetary measures as of September 1, 2020 and does not reflect any of the commitments made in the recent Speech from the Throne.
The Parliamentary Budget Officer (PBO) today launched a new interactive online tool for analyzing federal government personnel expenditures, releasing his key findings in complementary report.
The Parliamentary Budget Officer (PBO) today released his assessment of federal transfers to provincial and territorial governments over the last decade under the three largest programs: the Canada Health Transfer (CHT), the Canada Social Transfer (CST) and Equalization.